Pools Gain $4.7 Billion, But Mining Becomes Unprofitable — Report
Miner revenues exceed $4.7 billion this year, and the actual bitcoin's price of $6500 is almost twice higher compared to last fall’s indicator. Despite this, cryptocurrency mining is no longer exceedingly profitable due to increased competition and high tariffs for electricity, a research by Diar company reveals.
The report states that due to a multitude of reasons, mining has become less cost effective in 2018. The reasons include high costs for electricity, rental of premises, salaries and equipment expenditures. The current situation may eliminate small miners from the industry.
According to the statistics, profitability of amateur miners was equal to zero for the first time ever. This may be due to insufficient productive capacity of mining equipment and purchase of electricity at retail prices.
China remains among the few countries that offer optimal electricity tariff packages, hence making mining profitable. On average, the price per one kilowatt-hour does not exceed one US cent.
Meanwhile, an Australian company announced the launch of a data center, based on renewable energy sources, where miners will be able to mine cryptocurrencies with minimal losses.
Analysts at Diar concluded that mining fell under the control of large players and, most likely, in future it will also depend on solvent industry leaders like Bitmain. The company manages 11 pools in China, and plans to soon open three more in the US. Bitmain, for its part, reports that its profitability is dependable more on mining equipment sales, which make up 95% of revenues.
Previously, a Chinese miner was imprisoned for stealing electricity.